M/s R.P Sales Pvt. Ltd., Kanpur V. Asstt. Commissioner of Income Tax, Kanpur

ITA 691/LKW/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100364 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-08-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 29-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Principle of natural justice
• Section: 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI, A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.691/LKW/2014 ASSESSMENT YEAR 2004-05 ACIT, RANGE-VI, KANPUR VS M/S R.P. SALES PVT. LTD. 52/34, NAYAGANJ, KANPUR-208001 PAN AAACR 6917 L (RESPONDENT) (APPELLANT) SHRI PRADEEP KAPOOR, CA APPELLANT BY SHRI A.K. SINGH, CIT, DR RESPONDENT BY 11/08/2015 DATE OF HEARING 30 /0 9 /2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I, KANPUR DATED 28.05.2014 FOR THE AY 2004-05. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE CIT(A) HAS ERRED IN LAW AND ON FAC TS IN SUSTAINING THE ADDITION OF RS.5,53,558/-ON ACCOUNT OF CASH ALLEGED TO HAVE BEEN FOUND IN EXCESS AT THE TIME OF SEARCH ON 09.12 .2003. 2. BECAUSE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT NO EVIDENCE WAS BROUGHT ON RECORD THAT EXCESS CASH FOU ND AT THE TIME OF SEARCH BELONGS TO M/S ASHOKA PAN PRODUCT PV T. LTD., KAPUR, AS ASSOCIATE CONCERN OF THE APPELLANT. 3. BECAUSE CIT(A) HAS ERRED IN LAW AND ON FACTS IN IGNORING THE STATEMENTS RECORDED AT THE TIME OF SEARCH AND DISCA RDING THE EXPLANATION GIVEN DURING ASSESSMENT PROCEEDINGS BY TERMING THEM AS 'COOKED UP STORY' BY THE 'LEGAL BRAINS' OF SHRI PAWAN 2 KUMAR JAIN AND SHRI ATUL KUMAR JAIN FOR IRRELEVANT CONSIDERATION AND BY BOGEY OF ASSUMPTION AND PRESUMPTIONS. 4. BECAUSE, WITHOUT PREJUDICE TO THE AFORESAID, NO MATERIAL WHATSOEVER WAS FOUND DURING THE COURSE OF SEARCH AN D SEIZURE OPERATION FROM THE APPELLANT'S PREMISES WHICH COULD SUBSTANTIATE THE ADDITION FOR ALLEGED EXCESS CASH FOUND IN THE H AND OF APPELLANT, AS MADE BY THE ID. ASSESSING OFFICER AND CONFIRMED BY CIT(A). 5. BECAUSE THE ORDER APPEALED AGAINST IS CONTR ARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 3. LD. AR OF THE ASSESSEE REITERATED THE SAME CONT ENTIONS, WHICH WERE RAISED BEFORE THE LD. CIT(A) PARTICULARLY THE EXPLANATION OF THE ASSESSEE REPRODUCED BY THE LD. CIT(A) IN PARA 6.2.2 OF HIS ORDER. LD. DR SUPP ORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT IT IS NOTED BY THE AO ON PAGE 3 OF THE ASSESSMENT ORDER THAT SEARCH AND S EIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OUT IN THE BUSINESS PREMISES OF THE COMPANY ON 09.12.2003 AND IN THE COURSE OF SEARCH, CASH AMOUNTING TO RS.6,57,675 /- WAS FOUND, OUT OF WHICH, RS.5.00 LAKH WAS SEIZED. THE AO ALSO NOTED THAT IN THE CASH BOOK DATED 09.12.2003 SHOWING OPENING BALANCE OF CASH OF RS.1,03,917/- WA S FOUND AND IN THIS MANNER, EXCESS CASH FOUND IN SEARCH WAS RS.5,53,758/-. THE AO ALSO NOTED THAT IN REPLY TO QUESTION NO.6 IN THE COURSE OF STATEMENT OF SHRI AT UL KUMAR JAIN, HE WAS SPECIFICALLY REQUIRED TO EXPLAIN THE SOURCE OF EXCESS CASH FOUND AND IT WAS EXPLAINED BY HIM THAT THE SAID EXCESS AMOUNT OF CASH BELONG TO ONE M/S AS HOKA PAN PRODUCT PVT. LTD. AND THE SAME WAS KEPT IN ALMIRAH BY SHRI PAWAN KUMAR JA IN, DIRECTOR OF SAID COMPANY. THE AO ALSO NOTED THAT ON THE SAME DATE, SEARCH AND SEIZURE WAS CARRIED OUT IN THE BUSINESS PREMISES OF M/S ASHOKA PAN PRODUCT PVT. LT D. ALSO AND IN THE COURSE OF SEARCH OF THAT COMPANY, IT WAS FOUND THAT CASH WAS FOUND TO THE EXTENT OF RS.7,870/- AND IT WAS ALSO FOUND THAT THE CASH BOOK OF THE SAID COMPANY WAS NOT WRITTEN UP TO DATE AND THE SAME WAS WRITTEN ONLY UP TO 04.12.2003 SHOWING CLOSING CASH BALANCE OF RS.6,16,730/- ON 04.12.2003 AND FOR THE REASONS FOR KEEPING 3 INCOMPLETE CASH BOOK, IT WAS STATED THAT THE CASH B OOK WAS INCOMPLETE BECAUSE THE CONCERNED EMPLOYEE WHO WAS ENTRUSTED THE RESPONSIBI LITY OF WRITING THE CASH BOOK HAD GONE ON LEAVE. IT WAS ALSO EXPLAINED THAT THE B ALANCE CASH WAS KEPT AT PREMISES NO. 52/34 NAYA GANJ, KANPUR WHERE THE OFFI CE OF M/S R.P. SALES PVT. LTD. WAS SITUATED AND THE DIRECTOR OF THE SAID COMPANY S HRI SWAROOP CHAND WAS UNCLE OF SHRI PAWAN KUMAR JAIN, DIRECTOR OF THAT COMPANY I.E . M/S ASHOKA PAN PRODUCT PVT. LTD. IN VIEW OF THESE FACTS, THIS WAS THE EXPLANATI ON OF THE ASSESSEE BEFORE THE AO THAT THE EXCESS CASH FOUND IN THE COURSE OF SEARCH IN THE CASE OF THIS ASSESSEE WAS BELONGING TO M/S ASHOKA PAN PRODUCT PVT. LTD. BUT T HIS EXPLANATION WAS NOT ACCEPTED BY THE AO ON THIS BASIS THAT IN VIEW OF IN COMPLETE CASH BOOK OF M/S ASHOKA PAN PRODUCT PVT. LTD. THIS IS NOT ASCERTAINA BLE AS TO HOW MUCH CASH WAS FOUND SHORT IN THAT CASE AND MOREOVER, IF THE ENTIR E CASH SHORT FOUND IN CASE OF M/S ASHOKA PAN PRODUCT PVT. LTD. OF RS.6,08,860/- IS A DDED TO CASH AS PER BOOKS IN THIS ASSESSEES CASE OF RS.1,03,917/-, THE TOTAL CASH OF RS.7,12,777/- SHOULD HAVE BEEN FOUND AT THE ASSESSEE PLACE BUT THE CASH FOUND IN THE CASE OF THE ASSESSEE IS ONLY RS.6,57,675/- AND, THEREFORE, THIS EXPLANATION IS N OT ACCEPTABLE. IN OUR CONSIDERED OPINION, THIS BASIS GIVEN BY THE AUTHORITIES BELOW TO REJECT THE EXPLANATION OF THE ASSESSEE IS NOT PROPER. SINCE, SIMULTANEOUS SEARCH WERE CARRIED OUT AT TWO DIFFERENT PLACES AND STATEMENTS WERE RECORDED AT BOTH THE PLA CES AND EXCESS CASH WAS FOUND IN ONE PLACE I.E. IN THE CASE OF THE PRESENT ASSESS EE AND SHORT CASH WAS FOUND IN CASE OF M/S ASHOKA PAN PRODUCT PVT. LTD. AND EXPLAN ATION GIVEN AT BOTH THE PLACES WAS SAME THAT SOME CASH OF M/S ASHOKA PAN PRODUCT P VT. LTD. WAS KEPT AT THE BUSINESS OFFICE OF THIS ASSESSEE, THE CLAIM OF THE ASSESSEE DESERVES TO BE ACCEPTED BECAUSE IT CANNOT BE SAID AS AFTERTHOUGHT OR CREATE D STORY. REGARDING DIFFERENCE IN EXCESS CASH FOUND AT THE OFFICE OF THE PRESENT ASSE SSEE AND SHORT CASH FOUND AT THE OFFICE OF M/S ASHOKA PAN PRODUCT PVT. LTD., WE FIND THAT EXCESS CASH FOUND AT THE PLACE OF PRESENT ASSESSEE WAS RS. 5,53,558/- AND SH ORT CASH FOUND AT THE OFFICE OF M/S ASHOKA PAN PRODUCT PVT. LTD. WAS RS.6,08,860/- AND THEREFORE, THE EXCESS CASH FOUND AT THE OFFICE OF THE PRESENT ASSESSEE WAS LES S THAN THE SHORT CASH FOUND AT 4 THE OFFICE OF M/S ASHOKA PAN PRODUCT PVT. LTD. AND, THEREFORE, IN OUR CONSIDERED OPINION, UNDER THESE FACTS, THE ENTIRE CASH FOUND A T THE OFFICE OF THE PRESENT ASSESSEE SHOULD BE ACCEPTED AS EXPLAINED BEING BELO NGING TO M/S ASHOKA PAN PRODUCT PVT. LTD. AND IN RESPECT OF THE DIFFERENCE OF RS.55,102/- BEING MORE SHORTAGE IN CASH FOUND IN THE CASE OF M/S ASHOKA PA N PRODUCT PVT. LTD., EXPLANATION MAY BE ASKED FROM THEM BUT NO, ADDITION CAN BE MADE IN THE HANDS OF THE PRESENT ASSESSEE. WE, THEREFORE, DELETE THIS ADDITION. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (SUDHANSHU SRIVASTAVA) (A.K. GA RODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 30/09/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGI STRAR